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What You Should Know About Pending Home Sales This Month

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What You Should Know About Pending Home Sales This Month Pending home sales fell in September by -5.60 percent, and were 1.20 percent lower year-over-year. This is the first time in more than two years that pending home sales have fallen below year-earlier readings. September’s reading was below August’s reading of -1.60 percent.

The National Association of REALTORS, which released the report, expects lower home sales for the fourth quarter of 2013 and flat sales into 2014. NAR provided good news in its forecast of 10 percent growth in existing home sales in 2013 as compared to 2012.

A spike in mortgage rates in August coupled with rapidly rising home prices were seen as major factors leading to lower pending sales.

Real estate analysis firm CoreLogic has reported that August home prices were 12.4 percent higher than for the previous 12 months; this was the fastest annual growth rate for home prices since February 2006.

While positive news for homeowners and housing markets, rapidly rising home prices can cause some buyers to postpone or cancel their plans for purchasing a home.

Economic, Government Policy Challenges Reduce Buyer Enthusiasm

In addition to higher mortgage rates and home prices, recent concerns of investors and consumers about the government shutdown and its consequences were noted as factors contributing to lower pending home sales.

High unemployment rates are a lingering influence, as would-be home buyers waver in their decisions to take on a long-term obligation when unemployment rates remain higher than normal and job security is questionable.

Fed Expected To Maintain Bond–Buying At Current Level

The Federal Open Market Committee of the Federal Reserve meets this week and is expected to maintain its current level of $85 billion per month in Treasury securities and mortgage-backed securities. The fed’s program is intended to keep long-term interest rates, including mortgage rates, low as a means of supporting the economic recovery.

Mortgage rates are affected by bond prices; if the fed reduces its monthly bond purchases, demand for bonds would fall, and mortgage rates would be expected to rise.

Mortgage rates spiked in August on expectations that the FOMC would taper its monthly bond-buying, but have since trended lower. 

What’s Ahead For Mortgage Rates This Week – October 28, 2013

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What’s Ahead For Mortgage Rates This Week – October 28, 2013Federal government agencies issued reports that were delayed by the government shutdown; and Freddie Mac reported that average mortgage rates fell for all types of loans it reports. The National Association of REALTORS issued its Existing Home Sales report on Monday. While 5.30 million home sales were expected an annual basis, September’s reading fell short at 5.29 million sales.

August’s reading was adjusted from an original reading of 5.48 million, which equaled July’s reading. Higher mortgage rates and home prices were cited as contributing to the slip in September’s sales.

The Bureau of Labor Statistics issued the Nonfarm Payrolls report for September on Tuesday. September’s reading indicated that only 148,000 jobs were created as compared to economists’ expectations of 185,000 jobs and August’s reading of 173,000 new jobs.

National Unemployment Rate Dropped 

Analysts indicated that the modest reading for September was caused by uncertainty over the government shutdown, and also indicated that the economy is growing, but continues to experience ups and downs. The national unemployment rate for September fell from August’s reading of 7.30 percent to 7.20 percent.

According to the Commerce Department, construction spending rose by 0.60 percent in August as compared to expectations of 0.50 percent and July’s revised reading of 1.40 percent, of which 1.20 percent represented spending on residential construction. The Federal Reserve characterized residential construction as growing at a “moderate pace” in September.

The Federal Housing Finance Agency reported that August sales of homes connected with Fannie Mae and Freddie Mac grew by 8.50 percent on a seasonally adjusted year-over-year basis. This represented monthly growth of 0.30 percent and was the smallest rise since September 2012.

Good News! Mortgage Rates Fall

Thursday brought encouraging news with Freddie Mac’s Primary Mortgage Market Survey. Average mortgage rates fell across the board with the average rates for a 30-year fixed rate mortgage falling from last week’s 4.28 percent to 4.13 percent. 

The rate for a 15-year fixed rate mortgage dropped from 3.33 percent to 3.24 percent, and the rate for a 5/1 adjustable rate mortgage dropped from 3.07 percent to 3.00 percent. Discount points rose to 0.8 percent for 30 and 15-year fixed rate mortgages and stayed steady for 5/1 adjustable rate mortgages at 0.4 percent.

Weekly Jobless claims were higher than expected at 350,000 new claims; analysts had expected 337,000 new claims. The latest reading was below the prior reading of 362,000 new jobless claims.

The University of Michigan’s Consumer Sentiment Index was released Friday with some telling results. October’s reading 73.2 from September’s revised reading of 77.5. A reading of 74.8 had been expected based on September’s original reading of 75.2. Consumers interviewed for the October CSI indicated that the federal government was the major factor in lower confidence in the economy.

What’s Coming Up

A number of federal agencies are still delaying their reports. Next week’s scheduled economic news includes the Case-Shiller Housing Market Index, Consumer Confidence report and ADP’s Employment Report. Weekly Jobless Claims and the Freddie Mac PMMS will be issued Thursday. 

3 Easy Tips To Protect Your Deck This Winter

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3 Easy Tips To Protect Your Deck This WinterBarbecue season is all but over, and you won’t be spending as much time out on the deck. Don’t let it get you down, though. Spring will be here before you know it. There are a lot of things that can wear down and damage your deck, so protect your deck and make sure it stays in tip top shape over the winter.

Cover The Furniture

You want your deck to look as good in the spring as it does now. The first step is to cover all the furniture (don’t forget the grill!). Cover everything with commercial furniture covers or just use a tarp. Be sure that the covers fit snuggly.

They won’t do any good if they’re blowing through the neighbor’s yard. If you’ve got the space, make room in the garage for the deck chairs and table. They’ll last longer if you store them indoors for the winter.

Give It One More Good Cleaning

Dirt and dust can get trapped in the wood over the course of the summer, not to mention dog slobber or barbecue sauce. If you let these things stain your deck all winter, it will be a pain in your neck to get them out in the spring. Make sure to give your deck a thorough cleaning before it gets too cold.

You can use a pressure washer to spray away all the dirt. However, be careful not to splinter your wood, as pressure washers are powerful. Another option is to scrub the deck down with a brush. 

There are several commercial cleaners to choose from, but don’t get one with bleach. You don’t want your wood to fade. If this sounds like too much work, consider hiring someone to give your deck a professional cleaning.

Moisture Is The Enemy

Rain, sleet, and snow will seep into the cracks of your deck all winter. They can cause discolor, warping, and even cracking. Now is the perfect time to use a waterproof finish to seal all the little cracks in your deck and keep out the moisture all winter. There are a wide variety of finishes to choose from. Choose a darker or lighter finish to give your deck a new look.

We’re leaving behind the days of barbecues and swimming pools, and replacing them with wool socks and fireplaces. Over the winter you can’t give your deck as much attention, but you can make sure it stays healthy and strong until spring. A good deep cleaning and a fresh new finish are your keys to avoiding cracking, warping, fading, and mold. Put in the time now, and you’ll extend your deck’s life by years.

Why Should One Consider Refinancing Their Mortgage Now?

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Why Should One Consider Refinancing Their Mortgage Now?Refinancing a mortgage is a golden opportunity to lock in today’s low interest rate for the next 15 or 30 years. While interest rates now are still low, there’s a good chance they will be heading up in the coming months.

The Fed won’t maintain the current bond purchasing level forever, and just as rates spiked in September when the Fed hinted the bond purchasing would change, rates will spike even more when purchasing levels actually do change.

As interest rates remain very low for 30-year and 15-year mortgages, homeowners can benefit greatly from a refinance. Several types of people in particular should consider refinancing.

Carrying A High Rate

Anyone with an interest rate well above today’s level should think about a refinance. Unless the homeowner is planning to sell within the next few years, a refinance will almost always save money in the long run if the rate can be lowered by at least a percent.

Switching From FHA To Conventional

Given that FHA mortgages now carry mortgage insurance premiums for the life of the loan, it makes a lot of sense for borrowers to switch away from them when they can. Refinancing may be possible once the homeowner has built up enough equity to qualify for a mortgage from a traditional lender, without the burden of mortgage insurance.

ARM Coming Up On Adjustment

The low rate of an adjustable rate mortgage sticks only for the first few years of the mortgage. After this point, the rate adjusts each year based on market trends. Rather than paying the adjusted rate, which is almost always higher, homeowners can refinance into a new fixed rate mortgage to lock in one of today’s low fixed rates for the duration of the mortgage.

Cash Out To Consolidate Debt

Homeowners carrying high-interest debt, like credit cards and personal loans, can often benefit from consolidating it into their mortgage. As long as they maintain at least 20 percent equity in their home, they can get a cash-out refinance for an amount higher than their current mortgage balance. They can then use the difference to pay off high-interest debt.

City Lights Or Starlit Nights, What Home Location Is Best?

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City Lights Or Starlit Nights, What Home Location Will You Choose?If you are looking to buy a home, you might be wondering whether you should be looking for properties that are right in the center of the city or property in a rural area a short drive away.

The rural or urban decision will ultimately be up to you, as there are advantages and disadvantages to either option. The main difference will lie in your priorities – what type of lifestyle is most important to you?

Living In The City

One of the main perks of buying a property that is located in the heart of the city is that you may be able to enjoy convenient public transportation and you won’t have to use a car to get everywhere.

You are likely to have a shopping center and a supermarket within walking distance of your home, as well as other important amenities such as a doctor’s office, a pharmacy, a post office and more.

Also, if you enjoy attending concerts, visiting art galleries or enjoying other artistic events, you will find many more of these concentrated in the city center. You will also enjoy more options when it comes to shopping.

Of course, living in the city center means that property prices are usually a lot higher and you will likely end up with a lot less space for your money. Your kids might not have as much room to run around (unless you find a home near an urban park or a playground). Also, the hectic pace of the city, with all the traffic and high rise buildings, can be stressful for some.

Living Outside Of The City

When you buy a home just a few miles outside of the city, you will find yourself experiencing a completely different lifestyle. You will be a lot closer to nature, with plenty of walking trails and wild areas right outside your door. The air will likely be cleaner and you will be able to see the stars better at night time.

Many people feel safer letting their children play outside in the countryside and the cost of housing is usually lower than in the high density downtown core. Some people also prefer the peace and quiet of the city and would much rather go for a walk in the woods or have a campfire than attend a cultural event – so the country is the right place for them.  

Of course, possible disadvantages of rural life is that it can be inconvenient and time consuming to drive into town to get supplies or to meet up with friends. You must own a car in order to get around, as the public transportation system will not be as good as it is in the inner city.

These are just a few factors to consider when determining whether you would choose the city life or the country life.

Lastly, there are sometimes special home loan programs that focus on specific city areas or rural properties.  It would be a good decision to consult with your trusted mortgage professional right away in order to find out all of your options.